How much do you need to retire, and how long could your savings last? Step two takes the pot you built and starts paying you from it. Tell us what you spend now and what you expect to spend later. Amounts are in euros as your bank statement would show them. Include inflation in step 4 to see what they buy today.
Retirement, one question at a time
Saving for retirement?
Spending €1,200 a month takes about €360,000, or about €229 a month from 30 to 60.
€360,000Target amount for retirement Also called the FIRE number: 25 times a year of your retirement spending. A 1994 study in the Journal of Financial Planning and the 1998 Trinity University study found that taking 4% of a pot this size, rising with prices, lasted 30 years in most past periods of the US market.More in the glossary25 × a year of spending
€150 a monthNeeded every monthto have it by age 60 at 10% a year, starting with €1,000
58Reached at agewith €200 a month from today
€471,935Saved by age 60in 2056
€1,200 a monthMonthly income in retirementThe same amount every year.
beyond age 100How long the money lastspaying you from age 60
Based on 10% a year until 60, then 10% while retired, before fees. An estimate, not a promise.
Income at the 4% rule4% of your pot in the first year, divided by 12, then raised with prices every year. A rule of thumb from US market history, not a guarantee.More in the glossary€1,573a month, for 30+ years
Progress to your target amount131%
You reach your target amount at 58. Everything after that is a choice.
Spend what you planned€1,200 a monthLasts beyond age 100
Live on the 4% rule€1,573 a monthNever runs out in this illustration: €15,394,707 left at 100€373 a month more than you planned
In euros, before inflation
€13.6M€6.8MRetire at 60€471,9354% rule€15,394,707 leftYour plan€17,754,326 leftBuilding upPaying you
Age 30Age 50Age 60Age 70Age 90Age 100
Where your retirement money comes from
Your €471.9K pays you €1,200 a month to 100, €576K in all. At 100, €17.8M is still yours. Only €73K of that is money you put in; interest pays the rest.
Your pot at 60€471,935Growth while retired€17,858,391Everything it pays out€18,330,326Paid to you€576,000€1,200 a month, 60 to 100Still yours at 100€17,754,326Your own money back€73,000what you put inPaid by interest€503,00087% of what you get
Swipe sideways to see where it ends.
Before inflation, as your statement would show it. Growth while retired: 10.0% a year.
You plan to spend €800 less a month
Now€2,000
In retirement€1,200
Illustration only, not investment advice or a pension forecast. Real returns vary, and a bad first decade of retirement matters most.
The 4% rule, briefly
US studies of past market data (a 1994 study in the Journal of Financial Planning, then the 1998 Trinity University study) found that taking 4% of a mixed portfolio in the first year, then the same real amount every year after, lasted at least 30 years in most past periods. That is why the target amount (FIRE number) is 25 times a year of spending.
It is a rule of thumb from past data, not a promise. Retiring earlier than 30 years before the end, or into a falling market, calls for a lower rate.
Questions and answers
What is the FIRE number?
It is the size of pot that could pay your planned retirement spending under the 4% rule: 25 times a year of withdrawals. Spending 1,200 a month means withdrawing 14,400 a year, so the FIRE number is 360,000. With tax on withdrawals switched on, you need to take out a little more to spend the same, so the FIRE number rises.
What is the 4% rule?
A rule of thumb from US research in the 1990s (a 1994 study in the Journal of Financial Planning, then the 1998 Trinity University study): take 4% of your pot in the first year of retirement, then raise that amount with prices every year. In past US market data this lasted 30 years or more in most periods. It is not a promise: future returns may be lower, retirements can last longer than 30 years, and a bad first decade matters most. The studies show what happened in past US markets, not what will happen next.
Why can my plan run out while the 4% rule lasts?
The two lines start from the same pot but take out different amounts. Your plan withdraws what you plan to spend; the 4% rule withdraws 4% of the pot a year. If your spending is more than that, the pot shrinks faster and may run out before age 100. Retiring later, spending less or saving more each month moves the date.
How is tax on withdrawals calculated?
Only the part of each withdrawal that comes from gains is taxed, not the money you put in yourself. If 85% of the pot is gains and the tax rate is 19%, each withdrawal is taxed at about 16%, so you take out a little more to spend the same. Tax rules differ by country; this is an estimate, not tax advice.
Why is inflation off by default in the retirement plan?
With inflation off, amounts are shown as a statement would show them and withdrawals stay flat. Switch it on to see everything in today's money: your withdrawals then rise with prices every year so they pay for the same things, and the pot and FIRE number are shown at today's prices. The setting follows step 1 when you come from the calculator.
